16. Why shouldn’t I just claim bankruptcy?
Bankruptcy is certainly an option for individuals struggling with debt. Unfortunately it is one that will haunt your credit worthiness for the next 7 – 10 years. Usually a person would option for a Chapter 7 Bankruptcy and have all debts eliminated as well as any assets. Depending on your state you may or may not lose your home. Additionally a bankruptcy attorney will charge upfront money to handle your case.
In 2005 bankruptcy law was revised by the U. S. Government under pressure from creditors. They believed it was too easy for a consumer to accumulate massive debt loads and then claim bankruptcy thereby eliminating all debts and the Government agreed with them. As a result most consumers no longer qualify and are instead placed in Chapter 13 Bankruptcy.
Chapter 13 Bankruptcy offers protection from creditors while a court determines a new monthly payment on a set term. During the bankruptcy all balances are paid back, usually in full with interest. Many times the monthly payment is now much higher and the consumer simply cannot make that payment resulting in the bankruptcy being dismissed. The consumer is back at square one and worse off than before.
Debt settlement is a proven bankruptcy alternative. We believe that bankruptcy should always be the last choice for a consumer. If we feel it would be best for your situation we will always make the recommendation and refer you to a trusted bankruptcy attorney within our network.